16944- 20pp A5:Layout 1 15/11/11 14:35 Page 1

The Formation of Unilever 16944-Unilever 20pp A5:Layout 1 15/11/11 14:35 Page 2

Unilever House, , c1930 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 03

In September 1929 an agreement was signed which created what The Economist described as "one of the biggest industrial amalgamations in European history". It provided for the merger in the following year of the Union and Limited.

The Margarine Union had been formed in 1927 by the Van den Bergh and Jurgens companies based in the Netherlands, and was later joined by a number of other Dutch and central European companies. Its main strength lay in Europe, especially Germany and the UK and its interests, whilst mostly in margarine and other edible fats, were also oil milling and animal feeds, retail companies and some production.

Lever Brothers Limited was based in the UK but owned companies throughout the world, especially in Europe, the United States and the British Dominions. Its interests were in soap, toilet preparations, food (including some margarine), oil milling and animal feeds, plantations and African trading.

One of the main reasons for the merger was competition for raw materials - animal and vegetable oils - used in both the manufacture of margarine and soap. However, the two businesses were very similar, so it made sense to merge as Unilever rather than continue to compete for the same raw materials and in the same markets.

To understand how Unilever came into being you have to go back to the family companies that were instrumental in its formation. This is where our story begins. The Van den Berghs was born in 1819 in Geffen (the same village from which the Jurgens family was in the Netherlands and entered his father's barter also building its business). Simon decided to expand trade at an early age. Later he specialised as a butter his business by exporting butter to , the merchant and with his seven sons - Jacob, Mauritz, biggest market for Dutch butter, but ran into financial Henry, Zadok, Izak, Arnold and Samuel - built a difficulties so, in 1870, Jacob and Henry were sent thriving butter trade from the village of Oss in Brabant to London to look after the company's interests there.

The Van den Bergh factory in Rotterdam, nd. 03 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 04

The invention of margarine in 1869, a butter substitute similar product for Van den Bergh. With their made from animal fat, changed the family’s fortunes. enthusiasm and business acumen Van den Bergh Around 1871 their rivals, the Jurgens family, obtained soon caught up with Jurgens and overtook them the formula for making margarine from its inventor, in both production and profits. The development of Mège Mouriès. Inexplicably, Jan Jurgens visited Simon hydrogenation, a technique for hardening vegetable Van den Bergh with a sample of his new product. oils made it possible to use a wide range of raw His curiosity stimulated, Simon commissioned Daniel materials, not just animal fat. In 1891 Van den Bergh Hipkins of Tipton, near Birmingham, to develop a left Oss for new headquarters in Rotterdam.

The Van den Berghs in England As their business expanded in the late 19th century, The English business acted as a holding company the Van den Bergh family's resources were running low for the family's business interests everywhere. and avenues of financial backing in the Netherlands The Van den Berghs did not have to relinquish any had already been exhausted. It was easier to raise influence as they owned the ordinary shares. £450,000 capital in London, so the company went public there worth of preference shares were issued to the general on 9 March 1895, establishing a public limited public and two English directors were appointed to company. The old partnership was sold to this new company which was called Van den Bergh's watch over their interests. As managing directors and Margarine Limited (although the "Margarine" was majority shareholders in the new company, the Van den dropped after two years when the company changed Berghs preserved the original partners' control of the its name to Van den Berghs Limited on 29 May 1897). capital and management of the business.

Key Brands The Sunlight trade mark was registered by Lever & Co in 1884 although the product was, at first, manufactured for them by other soapmakers. Then, in 1888, William Lever acquired land on the banks of the and started to build his own factory, together with a village in which to house his workers that he would call . By 1897 the factory was producing 2,400 tons of Sunlight household soap per week, and production of , a toilet soap, was started in 1900. was first used as a name for soap flakes in 1900; Lux toilet soap was launched in the USA in 1925 and Europe in 1928. Shortly afterwards began the decades long advertising campaign using film stars to promote Blue Band. The campaign used the slogan “Blue promote the brand. Lever Brothers also diversified into Band – versch gekarnd”, meaning freshly churned, and it margarine and produced the first vitaminised margarine, rapidly became the most popular margarine brand in The Viking, in 1927. Netherlands.

Van den Bergh first launched their branded margarine on Solo was launched by Jurgens in 1899 to counter the Van the German market with Vitello in 1898, which was den Bergh entry into the German market. This was manufactured from animal fats, and its superior quality to followed by Pheasant. Although Jurgens registered Stork its competitors ensured its rapid success. It was soon as a trademark in London in August 1900 they did not joined by Sanella, manufactured from animal fats and introduce the branded margarine until 1920. Over the almond oil, and a Kosher margarine, Sana, in 1899. years the name Stork became synonymous with home Blue Band was launched in the UK in 1916 by Van den baking, especially in the UK. Rama was launched in Bergh, but not until 1923 in the Netherlands. It was Germany in 1924 where it quickly became a rival to Blue unusual at the time because it was made entirely from Band and, with the formation of the Margarine Union in vegetable and ground nut oils. Van den Bergh used 1927, the two brands were merged into one as Rama im Coppens, an Amsterdam advertising agency that was Blauband. influenced by English and American techniques, to 04 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 05

BlauBand Air Transport, c1930 Fore-runner of the Equalisation Agreement In 1919 the Van den Berghs founded Van den whose entire ordinary capital was held by NV Van Bergh's Fabrieken NV in Rotterdam, to which den Bergh's Fabrieken, made an agreement that the interests of Van den Bergh were an agreed ratio would be maintained between the transferred. The members of the Dutch side of the dividends on the three companies' shares, and family exchanged their Van den Bergh Limited shares between any payment or liquidation. By creating and for shares in the NV company. Van den Berghs incorporating two parent companies, one in England Limited and Van den Bergh's Fabrieken NV together and one in The Netherlands, Van den Bergh avoided then headed the Van den Bergh group. These problems such as double taxation. This arrangement two companies with a third one, NV Hollandsche set the precedent for the subsequent structure of the Vereeniging tot Exploitatie van Margarinefabrieken, Margarine Union and, consequently, Unilever.

The Jurgens Company In the 18th century the Jurgens family were carpenters, Jan, Henri and Arnold were also actively involved in working along the Dutch-German border repairing the firm and from the early 1870s were developing agricultural implements and farm utensils. Lacking the manufacture of margarine. ready money, many farmers paid the Jurgens in butter, which they sold in nearby towns. As this proved to By the end of 1888 Jurgens, as well as Van den Bergh, be a profitable enterprise, brothers Willem, Jan and was making margarine in Germany to counter the Leonard Jurgens moved to the Dutch town of Oss in import tariff. They launched a branded margarine, 1801 to focus their attention on the butter trade. Solo, in 1899 and succeeded in buying a large German business, A L Mohr of Hamburg, in 1904, They prospered in Oss and shrewd marriages speeded against competition from Van den Bergh. A general their progress. Two of Willem's nine children, Anton holding company, NV Anton Jurgens Vereenigde and Johannes worked with their father in the butter Fabrieken, was set up in 1906 comprising all the trade and in 1854 formed their own partnership, Jurgens’ interests in The Netherlands. Gebroeders Jurgens, to run the linseed oil mill and general business, whilst concentrating on the extension of the butter trade. By 1860 Anton's sons, 05 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 06

The Pooling Agreements The Dutch margarine industry as a whole saw its supplies of soap and margarine, as well as glycerine, a competitive strength weaken in 1906 and 1907 by-product, for explosives. Post-war there was a because butter was in plentiful supply and this lowered boom. Jurgens had started their own plant at Purfleet the value of margarine. Van den Bergh and Jurgens in England in 1917, but began buying existing factories faced stiff competition in England from Otto Monsted, a to extend their production. They bought the Olympia oil Dane, whose production already equalled theirs. The mill in Yorkshire, for which Lever Brothers had bid Dutch firms realised that if they carried their competition unsuccessfully, and gained control of the Home and to extremes it would kill both their trades. Colonial Stores, whilst Van den Bergh extended their Fulham factory. So, in the summer of 1907, Jan Jurgens approached his great rival Arnold Van den Bergh with a proposal for But the boom did not last. Jurgens suffered as they close co-operation, which would strengthen them had committed to ambitious schemes for oil milling in against competition from others. A secret "pooling" the Indies and South America. Van den Bergh, whilst agreement was reached on 13 February 1908 in which not so severely embarrassed by the drop in raw material the two companies agreed to pool their profits, which prices, were hit by the slump in the margarine market. would then be divided between them. On assessment In England, in particular, both Dutch firms had to face of their recent profits from the margarine side of the unpleasant trading conditions. They faced competition businesses, the ratio was roughly 60% to Van den in margarine not just from Otto Monsted but also from Bergh and 40% to Jurgens. It was an emergency Lever Brothers. Competition also began to arise in the measure, intended to run until 1926, but the agreement Netherlands from Hartog who were originally butchers never functioned properly, even after a modification in 1913 that allowed for an equal division of profits. in Oss but had expanded into the margarine and edible fat trade. By 1910 vegetable fats were beginning to replace animal fats in margarine, due to a new process called Relationships between the two companies were still hydrogenation, which could harden vegetable oils to the governed, albeit nominally, by the Profit Pooling point of animal hard fats. The earlier economic crisis Agreement of 1913. The atmosphere had been distant began to abate and 1912 saw Van den Bergh's profits but polite until the slump forced them into greater co- reach their highest level. With the outbreak of World operation. A third Pooling Agreement was signed in War I in 1914 both companies found themselves October 1920, which revived the agreements of 1908 financially challenged and the agreement was and 1913 and was intended to be maintained until suspended. 1940. It renewed the old arrangements for the exchange of information and for the sharing of profits During the war the oils and fats industry found itself on a basis of equality. under government control, producing much needed

06 The Van den Bergh depot in Fulham, c.1925 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 07

Birth of the dual structure After the First World War all subsidiaries of Van den the Van den Bergh family, it now affected the whole Berghs Limited came under the law of the country company and outside shareholders as well. in which they were established. The British fiscal authorities did not believe that the Dutch company NV The problem was solved by creating two holding Van den Bergh’s Fabrieken, established in Rotterdam, companies. Van den Berghs Limited was no longer was not controlled by the limited company in England the sole parent company of the Van den Bergh group: and therefore imposed taxes on the profits of the it became the holding company for the British Dutch company. Whereas the double-taxing problem companies, whilst the Dutch company became the had previously only concerned the Dutch members of holding company for all the continental companies.

The Entente Agreements Meanwhile the rise of Schicht in Central Europe very complicated, but based on an exchange of meant another formidable rival for Van den Bergh shares. This large group was involved in every kind and Jurgens. At the end of the war, Van den Bergh of undertaking in the oils and fats industry. In particular, had acquired a 50% share in Centra, a group of through Schicht, it had a large soap business. Eastern European manufacturers that had formed to counter the power of Schicht. As a result the parties agreed not to come to any arrangement with Lever Brothers unless all gave their In the worsening conditions of the raw materials consent. These so-called Entente Agreements were market, negotiations for a general alliance began. an essential step in the building of the final concern By the end of 1920 an amalgamation between Van den that would be Unilever. Bergh, Jurgens, Schicht and Centra had been worked out and two treaties signed. The arrangements were 07 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 08

Unilever Timeline

1801 Brothers Willem, Jan & Leonard Jurgens, move to Oss in The Netherlands to develop their butter trade

1819 Simon Van den Bergh, founder of the family’s margarine business, born

1820 Georg Schicht, founder of the family business, born

1848 Schicht acquire permission to build a soap factory in Ringelshain, Bohemia

1851 Birth of William Hesketh Lever 1800-1870

1854 Gebroeders Jurgens company formed in The Netherlands

1869 Invention of margarine by Mège Mouriès in France

1870 Jacob and Henry Van den Bergh move to England

1871 Jurgens family acquire the patent for making margarine

1882 Schicht build a factory in Aussig, Central Europe

1884 William Lever registers Sunlight trademark in the UK

1885 Lever Brothers started by William Lever and his brother 1870-1890

1888 Lever Brothers open a sales office in Sydney, Australia (Its first overseas.)

1890 Lever Brothers becomes a private limited company in the UK

1891 The Van den Bergh family leave Oss and move to Rotterdam

1895 Van den Bergh establishes a public limited company, Van den Berghs Margarine Ltd in the UK

1897 Merger of Calvé and Delft (France/Netherlands)

1898 Vitello margarine launched by Van den Bergh in Germany

1899 Jurgens launch Solo margarine in Germany

1890-1910 1904 Sanella margarine launched by Van den Bergh in Germany

1906 Jurgens set up NV Anton Jurgens' Vereenigde Fabrieken, comprising all the Jurgens interests in the Netherlands

1908 1st Pooling Agreement in The Netherlands

08 64-nlvr2p 5Lyu 51/114:36Page09 15/11/11 1 A5:Layout 20pp 16944-Unilever nlvrTimelineUnilever 1920-1930 1910-1920 1930 1929 1929 1928 1928 1927 1927 1925 1925 1924 1923 1920 1920 1920 1920 1919 1917 1916 1913 1912 qaiainAreetsge ewe ee rtesLimited Brothers Lever between signed Agreement Equalisation year the of end the at Union Margarine join Centra and Schicht September in Union Margarine joins Calvé-Delft UK the in Brothers Lever by launched margarine, vitaminised first the Viking, Leverhulme Viscount 1st Lever, William of Death USA the in Brothers Lever by launched soap Lux Germany in Jurgens by launched margarine Rama Schicht and Centra Bergh, den Van Jurgens, between signed Entente Great The Schicht and Bergh, Centra den Van Jurgens, between signed Entente Little The Netherlands The in Agreement Pooling 3rd Jurgens by UK the in launched is margarine Stork UK the in Purfleet at opens factory margarine Jurgens Bergh den Van by UK the in launched Band Blue Netherlands The in Agreement Pooling 2nd leBn anhdi h Netherlands the in launched Band Blue all which to transferred Rotterdam, are in interests continental company’s NV Fabrieken the Bergh's den Van forms Bergh den Van Europe Central in formed Centra nlvrcm nobigo January 1 on being into came Unilever January in Union Margarine joins Hartog Union Margarine the of Formation n VMraieUino September 2 on Union Margarine NV and 09 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 10

The Margarine Union Centra By 1912 the rapid progress of the Schicht By 1927 the outlook for the margarine industry business and its increasing share of the was discouraging. In Germany and the UK, the market was starting to cause concern to other two biggest markets, margarine showed no signs producers in the Austro-Hungarian Empire. of expanding. Lengthy legal arbitration was underway Following discussions, a plan emerged for a over the pooling agreement and what constituted merger of Schicht's competitors that would "poolable profits". It was such a complicated issue enable them to compete more effectively. The that there was little hope of Jurgens and Van den new organisation took the name "Centra" and Bergh ever reaching a consensus on the past. The comprised a formidable list of firms. future, however, was a different matter. Jurgens finally suggested the option that had been on the cards Dr Emmrich Granichstädten hoped that his for so long - a merger - and this was agreed on patent for a fat hardening process would give the 2 August 1927. group an advantage over Schicht, but Centra's grasp of financial matters was not as good as The amalgamation followed the dual structure model its technical knowledge and the organisation used earlier by Van den Bergh. Charles Wilson, the did not succeed as expected. Soon Centra was historian of Unilever, has described the merger as "a proposing a merger with Schicht, but the latter coalition between the two companies which, beside did not think the business profitable enough. Lever Brothers, were the greatest powers in the When war broke out, the value of Centra's oil European oils and fats industry". stock rose and temporarily restored the group to prosperity. At the end of the war Van den At that time company profits were subject to income Bergh acquired a 50% share in Centra. tax in the UK and relief of double taxation was given only to other countries in the British Empire. By the end of 1928 Centra had become part of the Margarine Union.

10 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 11

In the Netherlands companies were not subject to so be able to pass the dividends received on these a profit or corporation tax, but did have to pay a tax to its own shareholders without being taxed itself. on distributed dividends. So for tax purposes a Dutch An agreement was made that the profits of each holding company was better than an English one company be distributed to the shareholders in where subsidiaries were held outside the British Empire. dividends of equal value, and that capital value However, Britain did not charge shareholders income liquidation also be equal. tax again on the dividend they received from such profits, unlike the Netherlands. The solution,therefore, The merger was intended to eliminate competition was to form two holding companies, with the same between parties, reduce costs, increase profits board of directors, one in England for the British side and, as a result, the Margarine Union grew rapidly. and one in the Netherlands for the Dutch side, instead In September 1928 an alliance was made with of just one parent. Calvé-Delft, a Franco-Dutch company, who were also involved in oil milling, margarine and soap. Margarine Union Limited would hold the ordinary shares By the end of 1928 the Union also included Schicht of Van den Berghs Limited and pay its dividends out of and Centra, both from Central Europe, followed by profits already charged with UK income tax, so that the Hartog of Oss (in the Netherlands) in January 1929. shareholders would not have to pay income tax again. Jacob and Arthur Hartog and Heinrich and Georg NV would hold the shares of NV Anton Schicht joined the Boards of both the Margarine Jurgens' Vereenigde Fabrieken and NV Van den Unie and the Margarine Union. Bergh's Fabrieken and

Calvé-Delft This Franco-Dutch combine was formed from the merger of two companies in 1897. Its origins go back to an oil mill founded in Delft by van Marken in the 1880s, who also built a model village for his employees. Calvé of Bordeaux had connections with , dating back to 1816 when Victor Calvé, a naval surgeon, was shipwrecked off Senegal. He returned in 1825 and set up a trading company, which later diversified. An oil mill was opened at Laubardemont, near Bordeaux, in 1895.

In the 1920s Calvé-Delft bought the Rijswijk margarine factory near The Hague, plus others in Rotterdam, Germany and Czechoslovakia, as well as oil mils in Marseilles and a candle business in Lyons. By 1926 Calvé were selling 250 tons of margarine per week in Germany, 220 tons in Britain, and 120 tons in the Nether-lands, whilst the Dutch mill was crushing over 100,000 tons of raw materials and the French ones another 85,000 tons. Their reputation with the public in France and the Netherlands, however, rested mainly on cattle cake and fine salad oils. They threatened the Margarine Union's trade by competing at uneconomic prices, but if they could be brought into the fold they would bring new lines of business. By September 1928 a complex alliance had been formed with the Margarine Union. 11 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 12

Lever Brothers William Hesketh Lever (later Lord Leverhulme) was born in Bolton in Lancashire in 1851.

Working as a salesman for his father's wholesale grocery business, Lever recognised the advantages of not only selling, but also manufacturing, soap. In 1885 he rented a soap factory in and by 1888 had purchased land to build his own factory, and housing for his workers, on the banks of the river Mersey, opposite . Production there of Sunlight soap led to the village being named Port Sunlight. Aerial view of Port Sunlight village and factory, April 1952

Rising standards of living amongst the English middle Lever also had private interests in the food trade and working classes enabled Lever to apply modern purchasing, from 1917 onwards, (fish large-scale marketing methods to the promotion of shops), John West (canned goods) and Wall's his branded product, Sunlight soap, in the household (sausages and ice cream), which he sold to Lever soap business, which until then had been a bulk trade. Brothers in 1922-1923. When he died in 1925, his His success, consolidated by Lifebuoy and Lux toilet firm, in which he owned all the ordinary shares, was in , was enormous and, within in a very short space business throughout the world. Within one week of of time, Lever was selling soap all over the world. Lever's death Francis D'Arcy Cooper succeeded him as chairman. Cooper, an accountant long associated In response to the problem of obtaining raw materials with the Lever Brothers' business, had, effectively, Lever created his own sources of supply. He developed saved Lever Brothers from collapse. The purchase of plantations in the Solomon Islands from 1906 onwards the Niger Company in 1920 did not turn out to be a and in the Congo from 1911. His enterprise grew wise acquisition, as it had an overdraft of £2 million. to include oil milling and seed crushing, as well as Cooper had organised a loan whilst keeping creditors packaging, and transportation for his products. at bay. He went into the West African merchants' trade, which culminated in his purchase of The Niger Company in 1920.

12 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 13

Lever had made many acquisitions, not all of them Cooper, realising that Lever Brothers and the sound and after his death Cooper recognised that Margarine Union conflicted in too many areas, he had to bring the company back on an even keel. promoted negotiations and became a leading So he set about consolidating the business whilst figure in bringing about the merger. disposing of anything that did not show a likelihood of profit. The soap business recovered, but the margarine side was troubled by the same conditions of over- production, slow demand and competition from butter that were affecting both Van den Bergh and Jurgens, although in 1927 Levers produced the first vitamin enriched margarine. Birth of Unilever Unilever came into being on 1 January 1930. In Margarine Union and Lever Brothers were both simple terms it was formed from the merger of the European enterprises, one concentrated on the Margarine Union and Lever Brothers Limited. The two Continent and the other towards the UK but, already businesses came together because their similarities by 1929, their influence was felt throughout the world, were more important than their differences. They especially in Africa through Lever's plantations and the competed for supplies for fats and oils, and in the activities of the . same markets, and manufactured household goods. Both stood, therefore, to gain from a common Originally, negotiations between the two companies approach to the problems and opportunities offered had started in order to reach an agreement on the use by the market. of raw materials. Both companies had already

Unilever House, Rotterdam, 1931 13 16944-Unilever 20pp A5:Layout 1 15/11/11 14:36 Page 14

De Telegraf report on the formation of Unilever 1929 14 The Times report on the formation of Unilever, 1929 16944-Unilever 20pp A5:Layout 1 15/11/11 14:37 Page 15

encroached on each other's "territory". At a preliminary Agreement on dividends and capital values. These meeting early in 1928 it was suggested that Lever holding companies were to be known as Unilever Brothers should transfer their margarine interests to the Limited and Unilever NV. This dual structure continued Margarine Union and the Margarine Union transfer its the arrangement set up when Jurgens and Van den soap companies to Lever Brothers. This expanded into Bergh merged to form the Margarine Union Limited and discussions about regulating supplies of raw materials NV Margarine Unie in 1927. and co-operation in oil milling and refining, the production of edible fats other than margarine, and the It was agreed that the ordinary shares of Lever Brothers disposal of by-products. should be transferred to Margarine Union Limited in exchange for six million ordinary and 1,100,000 Various co-operative schemes were considered and preferred shares of that company. The names of the rejected before discussion reached possible Margarine Union Limited and NV Margarine Unie would amalgamation of the two organisations into a single also be changed to Unilever Limited and NV Unilever. concern. This could not be achieved, however, because As a result the holders of Lever Brothers ordinary shares of the widely different financial organisation of the two and Margarine Union ordinary shares would share in the parties. The capital of Lever Brothers Limited consisted surplus profits of the combined undertaking. Holders of predominately of preference shares, whilst that of the Lever Brothers ordinary shares would also acquire one- Margarine Union Limited and NV Margarine Unie was half of the voting control shares in the Margarine ordinary shares. Eventually John McDowell of Lever companies. Unilever Limited acquired the ordinary Brothers and Paul Rijkens of the Margarine Union came capital of £2,400,000 in Lever Brothers, all of which had up with a solution. The ordinary share capital of Lever been owned by Lord Leverhulme until his death in 1925. Brothers would be amalgamated with the share capital of There was no merging of interests at this time, because the Margarine Union companies, so that control of the the £54,227,546 worth of preference shares of Lever interests of both organisations would be vested equally in Brothers Limited were also outstanding and held by the the holders of the ordinary shares of Lever Brothers and public. the controlling shares of the Margarine Union companies. After the merger the control of the individual families The agreement, signed on 2 September 1929, together diminished although, out of 33 directors appointed to with the arrangements made to set up Unilever, is known the two identical boards in 1930, 14 belonged to the as the Equalisation Agreement. It is still in force today. It families of Unilever’s predecessor companies: Van den provided for two holding companies with identical boards Bergh (four directors), Jurgens (four), Hartog (two), and would continue the Margarine Union's Equalisation Schicht (three) and Lever (one).

Hartog The Hartog family were originally whoever could use most whale oil could butchers from Oss in the Netherlands. cut costs and prices and Hartog were By the 1920s the business was even buying some of their supplies from broadly two-fold: a large meat packing the Jurgens factory in Zwijndrecht. trade and an edible fat manufacture, Rather than try to squeeze them out of aimed mainly at the export trade. They the market, Paul Rijkens advised began to import vegetable ghee for another merger, but it took until January export to India, in competition with 1929 to bring Hartog into the Margarine Van den Bergh, who sought a merger Union when Jacob and Arthur joined in 1921 but were unsuccessful. Later the Board. in the 1920s they built a margarine factory inGermany not far from the After the merger the control of the Margarine Union's own factory in individual families diminished although, Cleves. out of 33 directors appointed to the two identical boards in 1930, 14 belonged to the families of The Hartogs were skilled in the use of raw materials Unilever’spredecessor companies: Van den Bergh (four and brought the use of hardened oils to a high level of directors), Jurgens (four), Hartog (two), Schicht (three) efficiency and economy. It was apparent that and Lever (one). 15 16944-Unilever 20pp A5:Layout 1 15/11/11 14:37 Page 16

The Equalisation Agreement The Equalisation Agreement forms an integral part PLC's Articles of Association provide that no person of Unilever PLC's Memorandum and Articles of shall be elected as Director except those nominated Association and Unilever NV's Articles of Association. by the holders of deferred shares (so called because It can only be terminated or altered with the consent they rank after the ordinary shares in annual profit of both parties and such resolutions are only valid appropriation). NV Elma, a subsidiary of Unilever NV, if passed in the way prescribed in the Articles. and United Holdings Limited, a subsidiary of Unilever PLC, each hold 50% of the ordinary shares numbered The Articles of Association specify that the Boards of 1 to 2,400 in NV and 50% of the deferred shares Directors must contain at least six and no more than in PLC. These two subsidiaries, therefore, draw up 25 members. It is possible to ensure that the Boards the nomination lists for the appointment of Directors are identical because NV's Articles grant the holders and only persons nominated by them can be of ordinary shares numbered 1 to 2,400 the right to appointed. draw up a binding nomination list for the appointment of Directors at the general meeting of shareholders.

The main features of the • If the current profits of one company are insufficient to Equalisation Agreement are: meet its ordinary dividends they are made up in the • That both companies adopt the same financial following manner: periods and the same methods of determining 1) from the current profits of the other company after current profits and free reserves. it has provided for its own ordinary dividends;

2) from the free reserves of the first company; • If, in any year, one company has losses or if its profits are insufficient to meet the dividends on its 3) from the free reserves of the other company. cumulative preference shares, the amount required to make good such losses and to pay these dividends • Issues of bonus shares or "rights" issues are, in in full will be provided in the following order out of: principle, only made in ordinary shares.

1) the current profits of the other company after it has • If both companies go into liquidation the amounts provided for its own preference dividends; available for distribution amongst shareholders are applied first by each company in meeting the claims 2) the free reserves of the first company; of its own preference shareholders. If either company has a surplus after the claims of its own preference 3) the free reserves of the other company. shareholders have been met in full, the surplus is • The Boards of the two companies decide on the applied in meeting the claims of the other company's same day what proportion of the aggregate of the preference shareholders. Any remaining surplus is current profits and free should, in their judgement, be then distributed amongst the holders of ordinary shares. distributed by way of dividend for year on the ordinary share capitals of Limited and NV on the basis that the • The equalisation of a nominal amount of Fl.12 sum paid on every EUR 0.16 (originally 12 Dutch (Guilders) ordinar capital of NV and a nominal amount Guilders*) nominal amount of NV ordinary capital shall of £1 ordinary capital of PLC arose because that was be equal in value (at the prevailing exchange rate) to the official Sterling/Guilder exchange rate when the the sum paid on every 3 1/9 pence (originally £1) predecessor of the Equalisation Agreement was nominal amount of ordinary capital of Limited. made in 1927. 16 16944-Unilever 20pp A5:Layout 1 15/11/11 14:37 Page 17

Schicht The Schicht group of companies comprised soap, The scale of such centralisation on one site was margarine and edible oil factories in Central and unknown in Central Europe and enabled Schicht's Eastern Europe. Its story began when Georg to reduce its costs far below competitors. Schicht obtained a permit from the authorities on 6 July 1848 to establish a soap factory at Schicht bought Khuner, an Austrian company, Ringelshain. By the 1870s the business was in 1912 for its coconut fat, Kunerol. Elida, supplying a wide market in Northern Bohemia. established in Vienna in 1915, was acquired in In 1882 Georg's son, Johann, masterminded the 1916 and Schicht then created Elida companies building of a new factory at Aussig (known as elsewhere in Central Europe. Links had existed Usti nad Labem in Czech) on the river Elbe in the between Jurgens, Van den Bergh and Schicht from German-speaking part of Czechoslovakia. By 1887 1920. In April 1929 the Schicht group of companies he had added a palm crushing mill and, within a few was entirely absorbed by the Margarine Union and more years, a washing powder mill, a fatty acid two members of the Schicht family, Heinrich and plant, a stearine plant and a copra crushing mill. Georg, joined the Board of Directors.

The Schicht factory, Aussig, nd Later changes Complete merger was not achieved until the Empire to the Dutch, which included all the shares in reorganisation and reallocation of interests in 1937. Lever's Zeep-Maatschappij NV in The Netherlands Unilever Limited was amalgamated with Lever and the Lever Brothers company in the USA. Because Brothers Limited, taking over its assets and liabilities. of the prevailing tax position at the time this transfer The shares held by Unilever Limited in Lever Brothers also had the advantage of avoiding double taxation. were cancelled and Unilever shares held by the public were exchanged for shares of the same type in Lever The structure created in 1937 has remained more Brothers Limited, whose name was changed to or less unchanged to the present day. Any later Lever Brothers & Unilever Limited. Unilever NV modifications to the Agreement in Supplemental changed its name to Lever Brothers & Unilever NV. Agreements have improved its operation without changing the substance. In 1952 Lever Brothers & A new Equalisation Agreement was made, adapting Unilever Limited changed its name back to Unilever the arrangements of 1927. The earning power of the Limited whilst Lever Brothers & Unilever NV changed Dutch company had declined, due to the economic its name back to Unilever NV. Unilever Limited was and political situation in Europe, so the English reregistered as a public limited company in 1981 company transferred its interests outside the British under the name Unilever PLC. 17 16944-Unilever 20pp A5:Layout 1 15/11/11 14:37 Page 18

Some of the Key Players in the Formation of Unilever

BESSBOROUGH, Lord HARTOG, Arthur (1880-1956) (1891-1985) Son of Hartog Hartog and brother of Sir Vere Brabazon Ponsonby was Jacob. Joined his father's business in 1908. a Member of Parliament for the Vice chairman of NV 1938. Retired 1951. Conservative Party from 1913 to 1920 when he succeeded to the peerage as 9th Earl of Bessborough. He held directorships in several large commercial firms, and was deputy chairman of HARTOG, Jacob DeBeers Consolidated Mines, as well as being (1875-1962) Chairman of Margarine Union. He became Governor Son of Hartog Hartog and brother General of Canada 1931-1935. of Arthur. Director of Ltd and NV 1930-1933. COOPER, Francis D'Arcy 1882-1941) Partner in Cooper Brothers & Co, Lever JURGENS, Anton Brothers' accountants. He first became (1805-1880) heavily involved with Levers after the Son of Willem Jurgens who moved purchase of the Niger Company in 1920. the family to Oss in The Netherlands. This had not been a wise purchase, as the Niger Co Formed Gebroeders Jurgens with his had an overdraft of £2 million. D'Arcy Cooper effectively brother Johannes (1807-1887) in 1854. saved Levers by organising a loan whilst keeping Father of Jan (1835-1913), Hendrik creditors at bay. As a result he was consulted with the (1840-1888) and Arnold (1842-1912). authority of a Director of the company and by 1923 was joint vice-chairman and a member of the Special Committee. He succeeded the 1st Viscount Leverhulme as chairman of Lever Brothers within one JURGENS, Anton (1867-1945) week of the latter's death. A leading figure in bringing Son of Hendrik and grandson of Anton about the final merger, he became the first Chairman the elder. The moving spirit of the next of Unilever Ltd. generation, his ambition was to be associated with Lever Brothers. Director DE BLANK, Joost of Ltd and NV 1930-1931. Joint (1871-1952) Chairman of Unilever Ltd and NV Financial wizard in Van den Bergh. Moved from 1931-1932. Germany to England in 1909 to be chief accountant. Head of Unilever’s financial department in London from 1931 until his retirement in 1943. JURGENS, Frans (1869-1941) GREENHALGH, Harold Robert Son of Hendrik and grandson of Anton (1879-1948) the elder. The family's technical expert. Son of an accountant from Bolton, he In 1905 he created a brand called joined Lever Brothers at the age of 14. Friesland Maid for the English market, He overhauled Unilever's book-keeping which was a great success. system. Director of Ltd and NV 1930- 1937, of NV 1937-1941 and Vice chairman of Ltd 18 1937-1941. 16944-Unilever 20pp A5:Layout 1 15/11/11 14:37 Page 19

JURGENS, Johannnes (Jan) SCHICHT,Georg the younger (1835-1913) (1884-1961) Son of Anton the elder. Great rival of Grandson of Georg the elder. A scientist. Arnold van den Bergh. Father of Gerard Director of Ltd 1930. 2nd chairman of (b1873), Rudolf (1875-1954), Emile Unilever NV 1932-1937. Retired 1946. (1878-1929), Victor (b1881) and Maximilian (b1887). SCHICHT,Heinrich LEVER, William Hesketh 1st (1880-1959) Viscount Leverhulme Grandson of Georg the elder. A financial expert. (1851-1925) Succeeded his father Johann as president of Schicht Founder of Lever Brothers Ltd. Built AG in 1907. Director of Unilever Ltd and NV 1930-1937, a model village for his workers alongside Ltd 1937-1939, and Chairman of NV 1937-1939. his soap factory in Port Sunlight. A philanthropist and art collector. By the early 20th century he and his company owned factories and VAN DEN BERGH, Jacob (1848-1934) plantations all around the world. Eldest son of Simon. Sent to London in 1870 with his brother Henry to look McDOWELL, John after the company's interests there. Father of Albert (b1875), Sidney (1874-1936) (b1877) and Henry (b 1882). Company Secretary of Lever Brothers from 1905 until 1915 when he was appointed as a director. Director of Ltd and NV 1930-1939 and Ltd 1939-1940. VAN DEN BERGH, Samuel (1864-1941) Youngest son of Simon. Built company POLAK, Jacques L back up after World War I. Responsible (1883-1948) for introducing trained chemists into the An Amsterdam lawyer, who made himself concern. His son, Professor George Van indispensable to the Van den Berghs in den Bergh, said in an interview in 1952 that "he was in the decade following the First World War many ways a man of his time: he had an invincible belief as more and more complex agreements in progress - progress of science and technology, and were made. Also Managing Director of NV Van den the improvement of social conditions, which this Bergh’s Fabrieken from 1928. Married a daughter of progress could bring. He felt that all men were equal Arnold Van den Bergh. Director of Ltd and NV 1934- and he was equally at home with all men… He had a 1939, Ltd 1939-1946 and NV 1945-1947. childlike belief in good: he could not and would not believe in evil or misfortune".

RIJKENS, Paul VAN DEN BERGH, Simon (1888-1965) (1819-1907) The son of a director of Hagemann, Born in Geffen, North Brabant. a Rotterdam margarine company Founder of the Van den Bergh margarine acquired by Van den Bergh in 1903. business. Married his cousin, Elisabeth Joined Van den Bergh in 1910 and van der Wielen in 1844. Had seven sons became a powerful figure in the company. Worked - Jacob (1848-1934), Maurits (1849-1912), Henry closely with . Director of (1851-1937), Izak (1853-1945), Arnold (1857-1932), Unilever from 1930 and later chairman of NV. Zadok (1859-1942), and Samuel (1864-1941). Died in 1907, the same year as his wife. SCHICHT,Georg the elder (1820-1887) Founder of the company; built the family’s first soap factory. 19 16944-Unilever 20pp A5:Layout 1 15/11/11 14:37 Page 20

Information Guide No. 4

Unilever Archives & Records Management PO Box 69, Port Sunlight Wirral CH62 4ZD Tel: +44 (0)151 641 4551 Email: [email protected]